Online marketplace system and method

ABSTRACT

A computerized online marketplace that facilitates the acquisition of funding and services for the development and operation of an online business. It provides a variety of investment opportunities for investors and facilitates an entrepreneur&#39;s acquisition of capital as well as skills and services needed to start an online business. Possible investment channels for potential investors comprise: money; skills; and services. Investors are awarded investment points for monetary and non-monetary investments and are compensated according to their points. Monetary compensation is awarded periodically to investors according to their rank in relation to the respective investor base of a given business entity. Businesses are hosted at the online marketplace and all aspects of investment and operations are managed through the marketplace thereby facilitating interactions between all parties involved in business initiation, development and operation, including customers.

CROSS-REFERENCES TO RELATED APPLICATIONS

This application claims priority to U.S. application Ser. No.12/816,616, filed Jun. 16, 2010 and titled ONLINE MARKETPLACE SYSTEM ANDMETHOD, now U.S. Pat. No. 8,321,321, issued Nov. 27, 2012, the contentof which is incorporated herein by reference.

FIELD OF THE INVENTION

The present invention relates generally to computerized systems andmethods for developing and operating an online business. In particular,the present invention relates to a computerized online marketplacesystem and method that facilitates the acquisition of funding andservices (equity) in addition to certain essential services to onlinebusiness entities (proxy-equity) for the development and operation of anonline business. The invention also relates to a method of compensationdistribution to both equity and proxy-equity investors in a Multi-LevelMarketing (MLM) like fashion.

BACKGROUND OF THE INVENTION

The requirements for starting an e-commerce business are numerous.Raising capital is one of the most important concerns for any startupbusiness, including an e-commerce business. In the case of onlinee-commerce businesses, which are typically individual-owned, therequirements extend beyond merely obtaining capital. The business mayfurther require technology skills to host a website, internetadvertising and marketing skills to sustain business growth, logisticsand fulfillment skills to serve customer needs, etc. Websites such aseBay® serve as facilitators in this respect by providing for a nominalfee the necessary software and payment infrastructure, customerreview/feedback infrastructure, and potential customer base to aspiringe-commerce entrepreneurs. However, there are certain critical aspects ofbusiness operations that these websites fail to provide such as shown inTable 1.

TABLE 1 Unmet Requirements to Initiate and Operate an Online Business 1.A business plan that defines the products and/or services to be sold;existing websites do not provide business plans to their subscribers(who are interested in investing but not sure what to sell) 2. Capitalfor procuring products and/or developing services to be sold; existingwebsites do not provide capital to implement business plans of theirsubscribers (who know what to sell but lack capital) 3. E-commercebusiness know-how including experience and skill in describing andlisting the products, receiving and fulfilling orders, providingcustomer service, etc.; existing websites do not provide online businessknow-how to subscribers (who do not know how to sell) 4. Identificationand acquisition of customer base for a given product prior to launchingthe business and getting market noticiability; while existing sitesoffer ‘potential’ customers, none of these can assure a ‘confirmed’customer base before business launch to their subscribers (who have allthat it takes to start an online business but are skeptic about itssuccess)

While there are several organized avenues such as angel investor andventure capital networks that facilitate business initiation andoperation by matching investors and entrepreneurs, these do not fit therequirement of starting an e-commerce business for a variety of reasonssuch as the scale in which they operate, additional requirements of ane-commerce business and the very nature of e-commerce businesses, etc.For this reason, e-commerce entrepreneurs often turn to family membersor friends to provide capital or to acquaintances of family members andfriends. Although there are opportunities for various parties equippedwith different skills and resources to benefit from a mutual businessrelationship, there are limited opportunities for them to find eachother. There is a need for a computerized system and method:

-   -   a) that facilitates the process of starting and operating an        online business by matching various parties equipped with        different skills and resources;    -   b) that assists an entrepreneur with a business plan or an        investor with resources in completing a variety of activities        and tasks related to starting an online business;    -   c) that supports the location and engagement of individuals and        other service providers that can assist the business initiator        in starting an online business;    -   d) that facilitates the acquisition of funding and services for        the development and operation of an online business; and    -   e) that compensates parties according to their contributions to        an online business and that facilitates the distribution of        compensation.

Customers have always been considered external entities to the business(e-commerce or otherwise) itself though their contribution to thebusiness success, just by being who they are—customers—is not trivial.The concept of Multi-Level Marketing (MLM) addresses this concern to anextent by making customers stakeholders in business success but, ofcourse, this comes with a rigid set of rules by MLM participants. Whilethere are several inventions in the field of MLM, all of these are aimedat addressing concerns of the companies that adopt MLM approach in termsof sustaining consumer motivation to participate in the program orproviding near equal opportunity to all the consumers etc. The rulesaspect of MLM from a customer perspective is an under researched field,if not untouched.

With the tremendous advancement of computer and internet technologiesand profound penetration of the personal computer in today's world,there are several ways an average online consumer could provide valueadditions to online business entities they are interested in and getcompensated in return. At the same time and for the same reason, one ofthe major challenges faced by online business entities is‘noticiability’ on internet. At present, there is no consistent platformthat brings both businesses and consumers to the table and letsconsumers fully tap the advantages offered by technological advancementswhile filling in the requirement of businesses to acquire marketnoticiability.

Thus, there is also a need for a computerized online marketplace

-   -   a) that is consumer-centric where subscribers/customers are        provided the flexibility to choose how to participate in an        MLM-like program;    -   b) that integrates business customers with the process of        business initiation and operation;    -   c) that acts as a neutral platform for online businesses and        their customers to interact for mutual benefit;    -   d) that enables online businesses to induce their customers to        provide required inputs for business growth as well as lets the        customers provide these inputs; and    -   e) that has the capability of aggregating the individual        customer investments for the benefit of the businesses and has a        method in place to compensate the customers for their        investments.

SUMMARY OF THE INVENTION

The present invention is a computerized online marketplace thatfacilitates the acquisition of funding and services for the developmentand operation of an online business. The online marketplace provides avariety of investment opportunities for subscribers of the marketplaceand facilitates business initiator's acquisition of resources as well asskills and services needed to start and operate an online business. Inaddition, the marketplace also attracts services from prospectivebusiness customers that are specific to online businesses, referred toas proxy-equity, which in itself is the purpose of the invention.

The online marketplace operates both as a primary (stock) market forbusiness startups on the marketplace and a secondary (stock) market forexisting businesses on the marketplace or elsewhere (which have a proxystore on the marketplace). However, the stakes traded in case of themarketplace could either be equity or proxy-equity stakes.‘Collaborative business ownership’ feature of the online marketplaceworks similar to a primary stock market (which deals with the issuanceof new equity securities to raise capital) for businesses started on themarketplace, not just in terms of raising the necessary capital but alsoin providing the other key requirements for an online ecommerce businesssuch as a business plan, know-how, ‘confirmed’ customer base, etc. Forexisting businesses, the marketplace is a platform that enablesproxy-equity trading and settlements, analogous to the way a secondarystock market functions.

Possible investment types on the online marketplace are broadly placedunder three categories: money; skills; and services (time and effort).Different investment types are quantified on the marketplace using acommon scale of Investment Points (IPs). For a given business enterpriseon the marketplace, business initiators or owners associate certainnumber of Investment Points (IPs) to various actions possible bysubscribers on the marketplace that serve the objectives of the businessin question. Algorithms that govern association of IP value tosubscriber actions are abstracted by marketplace business framework thatdirectly interfaces with the end users. Subscribers then make equity orproxy-equity investments in terms of the three investment categories:money; skills; or services (time and effort) by performing the actionsto get compensated with respective number of IPs. Finally, at the end ofeach pre-determined business cycle, equity/proxy-equity settlements aremade. IPs are converted to cash equivalent using an algorithm called‘Dynamid algorithm’ on the marketplace.

With wide varieties of investment options possible on the marketplace,subscribers are free to choose the way they contribute to the businessentity in question and get compensated. Thus the marketplace not only isa platform for floating online e-commerce businesses but also enablesconsumers to own their individual cash generating businesses where inthe investment is in terms of proxy-equity towards various listed onlinebusinesses on the marketplace. Such consumer owned businesses on themarketplace are referred to as Meta-Businesses. Empowering consumers toown Meta-Businesses is one of the main objectives of the system andmethod.

Online e-commerce businesses are listed as business-proxies on themarketplace. Each business-proxy listed corresponds to a ‘real’ onlinebusiness—either an existing one or one intended to be initiated on themarketplace.

The computerized online marketplace facilitates multiple levels ofinteraction between various participants in the marketplace. In anexample embodiment, interactions are achieved by way of socialnetworking. Most important among these are subscriber-subscriberinteraction, subscriber-subscriber community interaction, andsubscriber-business proxy interaction, thus enabling easier location andengagement of individual service providers and proxy service providersfor business inception and operation on the marketplace. This also letsbusinesses to interact with consumers for mutual benefit.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagrammatic view of a computerized system according to theinvention;

FIGS. 2A-2D illustrate a compensation distribution process (Dynamidalgorithm) according to the invention; and

FIG. 3 is a chart plotting transformed neighborhood performance index(TNPI) values for the example case study detailed below.

DETAILED DESCRIPTION OF EXAMPLE EMBODIMENT(S)

Referring to FIG. 1, a diagrammatic view of a computerized systemaccording to the invention is shown. One or more server computers 108,110, 112 accessible via the Internet 106 support user computer 100, 102,104 interactions with in online marketplace. Various applications andalgorithms executed at the servers provide features and functionality toenable various marketplace specific actions by the subscribers—bothcustomers and online businesses—in realizing the concepts of ‘proxyequity’ and ‘Dynamid’. Example embodiments of the invention also includesocial networking components to enable interaction between thesubscribers.

In an example embodiment of the invention, the online marketplace isimplemented as a social networking website that serves as a platformwhere product (or service) providers/suppliers and consumers interact ina way that is mutually beneficial. From the point of view of suppliers(e.g., manufacturers, distributors, retailers or multi-level marketers),the online marketplace is a business sales channel. For businesses thatare started on the online marketplace, it also serves as a primarymarket where public investment (not necessarily monetary) may be sought.From the point of view of consumers, the online marketplace is a stockmarket of business opportunities—with each business or supplier listedon the marketplace representing an opportunity for consumers. Forconsumers, it further operates as a social network to interface withfellow consumers or suppliers and as a business portal, whereconsumer-specific businesses (meta-businesses) may be established.

From the point of view of the marketplace, more consumers imply moresuppliers and hence more business on the marketplace. Search engineoptimization (SEO) and social networking functionality provide the pathsto acquire and retain a supplier and consumer base. The onlinemarketplace with its suppliers and consumers may be viewed as anaggregation of abstracted multi-level marketing (MLM) entities calledDynamids on the marketplace (analogous to MLM businesses beingabstracted as pyramids).

Business Model

The online marketplace leverages on the power of building collaborativeon-line business communities to offer flexibility and ease to itssubscribers in owning profitable businesses—e-commerce businesses aswell as meta-businesses. As a result, an aspiring entrepreneur (or aconsumer wanting to establish his or her own money generatingmeta-business) may focus on the business aspect of his or her interestor capabilities while the business model of the marketplace augments therest. True potential of the business model lies in the flexibility itoffers to its subscribers in terms of the investment types—or actionsperformed by subscribers on the website. Subscriber actions areconsidered investment types and awarded through the marketplace.

Glossary of Terms

The following is a list of terms/components used in explaining how themarketplace business model is accomplished—

A) Online Marketplace Subscribers—Any person or organization registeredwith online marketplace is considered a subscriber. Subscribers may beproduct or service sellers and consumers. Subscribers may participate inmultiple roles at a time.

B) Investment Channels & Types—Subscribers of the marketplace areprovided with a wide variety of investment options which may beclassified into three categories—Money, Skill, and Services (Time andEffort). These categories are referred to as investment channels on themarketplace. Particular subscriber actions that fall in each categoryare called investment types (ITs) or contribution types.

C) Investment Points—Quantization of investment type actions on themarketplace is achieved through investment points (IPs). All possiblesubscriber actions that benefit business entities on the marketplace areassociated with certain number of IPs as per the discretion of thebusiness entity owner/s. When subscribers perform the action, they areawarded corresponding investment points (IPs).

D) Business-Proxy and Policy-Set—Online businesses are listed on themarketplace as Business Proxies. Business proxy is analogous to ‘listedcompany’ on a stock market. Business proxies on the marketplace areeither created explicitly by business promoters or are implied in casebusiness transactions are enabled on the marketplace for businesses withno registered proxy on marketplace.

Business proxy, as the name suggests, is quite separate from thebusiness it corresponds to in terms of business operations and is meantto encapsulate objectives of the online business on the marketplace.This is accomplished by way of formulating a proxy policy-set thatdetails several aspects like permissible investment types, IT-IP mappingand IP settlement (Dynamid) details etc.

E) Business Platform—Subscribers of the marketplace collaborate withhosted proxies and fellow subscribers on an abstract staging platform,which is the marketplace business platform. This is analogous to‘trading ring’ of a stock market. Marketplace primary and secondarymarket activities are published and conducted here.

F) Meta-Business—Default businesses owned by subscribers on themarketplace are called meta-businesses. Subscribers invest in theirmeta-businesses by way of performing permissible actions of listedproxies on the marketplace, earn IPs and finally get compensated throughIP settlement. Key components of a meta-business are 1) proxy portfolio;2) investment channels/types; and 3) investment points.

G) Proxy-Equity—Proxy ownership interest in an online enterprise in theform of Investment Points (IPs) on the marketplace. It also refers tosuch intangible assets of an online entity as visibility on theInternet, potential to continually acquire customers, confirmed customerbase in case of a startup etc., that are exchanged against IPs on themarketplace.

H) Business Cycle—Duration between two successive subscribercompensation settlements using Dynamid algorithm is considered businesscycle of the respective business proxy.

I) Dynamid—IP settlement is accomplished on the marketplace usingDynamid algorithm. Dynamid is a dynamic pyramid.

On the marketplace, for a given business proxy in a given businesscycle, all the subscribers holding proxy equity (in the form of IPs) aredynamically positioned into a pyramid structure and a payback componentis determined for each subscriber. Dynamids are dismantled oncecompensations are calculated and built from scratch for subsequentbusiness cycles.

A Dynamid differs from a classical MLM pyramid in a number of ways, thusaddressing several consumer concerns in a typical MLM scenario.

Collaborative Business Ownership

This feature lets a subset of subscriber base of the marketplace to gettogether and initiate a business enterprise. It also integratespotential customers into the process of business initiation using theconcepts of proxy-equity and Dynamid, thus provides several advantagesto all parties involved.

Collaborative business ownership feature of the online marketplace workssimilar to primary stock market and is realized by what is called anInvestment Point Offering (IPO) on the marketplace. Skill to develop abusiness plan for an online business is considered primary investmenttype; any subscriber with this skill could initiate an IPO session onthe marketplace. Other requirements for the business such as monetaryand service inputs, associated skill requirements are case dependent andare defined by primary investors, before initiating IPO session.Alternately, monetary investors may initiate a pre-IPO session, the endstate of which typically launches an IPO on the marketplace.

Initiators of an IPO session on the marketplace have an option to floatequity or proxy equity shares or both, based on the perceivedrequirement. Marketplace subscribers may then bid for either of theshare types based on the chosen investment type. Direct or indirectmonetary investment types in addition to primary investment type attractequity stakes while consumer specific investment types typically fetchproxy equity stakes in an IPO session. Investment types that attractproxy equity may include activities such as writing a review, providingdirect or indirect referrals, blogging on related topics, providinguni/bi-directional links to the online entity or being a customer.

Use-Case View of IPO Scenario on the Marketplace—Collaborative BusinessOwnership Explained

The use-case view provides a description of end-to-end user actions andinteractions with co-actors that span the following three phases ofcollaborative business ownership feature on the marketplace:

TABLE 2 Phases of Collaborative Business Ownership Feature 1. Pre-IPO;2. IPO; and 3. Post-IPO.

TABLE 3 Actors in Collaborative Business Ownership Scenario ActorDescription Online Marketplace Subscribers of online marketplaceinterested in direct monetary Angels investment. Online MarketplacePrimary skill investors in the online marketplace; business planEntrepreneurs owners. Skill Investors Associated skill or serviceproviders who may also be indirect monetary investors in an IPO phase.Primary Investors Online marketplace Angel or Entrepreneur or both,whoever is instrumental in launching IPO or Pre-IPO session. SecondaryInvestors Angel, associated skill investor or provider, or servicesinvestor Proxy Equity Investors Bidders of proxy equity; predominantlytime and effort investors, a subset of which are confirmed customers.

Each of the following subsections detail the three phases depicted inTable 2. A fictitious case study is also given at the end of each stepas an example to help correlate with the event/action flow.

Pre-IPO Phase of Collaborative Business Ownership Feature

This phase is optional and may precede an IPO phase where onlinemarketplace angels call for business plans from the subscriber base ofthe marketplace based on set criteria that define the angel's investmentobjectives.

Steps involved in this phase include:

1. Initiate pre-IPO session; 2. Receive proposals (from Angel'sperspective) and evaluate; 3. Send counter-proposals to business planowner/s and finalize partnership details; and 4 Initiate IPO phase

Pre-IPO Step I: Initiation (Actor—Marketplace Angel)

Angels initiate pre-IPO sessions on the marketplace by providing variousdetails (shown in Table 4) that reflect their investment objectives.Online marketplace provides necessary screens to capture these details.

Case Study—Pre-IPO: Step I

Angel A, who is a registered user of the online marketplace, initiates apre-IPO session on Oct. 1, 2010 with the details shown in Table 4.

TABLE 4 Pre-IPO Session Details No. Pre-IPO Details Case study details 1Monetary investment limit $2000 2 Business type/s interested in Onlineecommerce business preferably dealing with niche artistic products 3Pre-IPO session window 10 days 4 Whether interested in sharing businessYes with other angels, if the required monetary investment for selectedbusiness plan exceeds Angel's investment 5 Whether interested insplitting No the investment if more than one business plans lookappealing 6 Whether expects any mandatory monetary Yes investment frombusiness plan owners 7 If answer for Q6. is ‘Yes’, 50% (meaning expectsthreshold percent at least $1000 from business plan owner)

Pre-IPO Step II: Receive Proposals and Evaluate (Actors—Angel &Entrepreneurs)

Pre-IPO details are published on the marketplace business platform andsubscribers are notified of it based on a push or pull mechanism as pertheir set preference. Interested investors may respond by providingbusiness plan details. The angel evaluates the business plans submittedby entrepreneurs.

Case Study—Pre-IPO: Step II

By Oct. 10, 2010 angel A receives four proposals that he evaluates andshortlists two business plans.

Pre-IPO Step III: Send Counter-Proposals to Business Plan Owners(Actors—Angel & Enterpreneurs)

The marketplace, with its social networking features, enables multipleways of interaction between angels and entrepreneurs. Proposal andcounter-proposal exchanges between the angel and the entrepreneur/s areexpected to finalize the details shown in Tables 5, 6, 7A and 7B, inpreparation for the further phases of business inception. Themarketplace helps business initiators by providing necessary screens tocapture and exchange these details. Most of the IPO details (Table 7A &7B) constitute the policy-set for the proposed business proxy.

Case Study—Pre-IPO: Step III

Understanding between angel A and one of the two entrepreneurs (B) onOct. 20, 2010 constitutes the details depicted in Tables 5, 6, 7A and7B.

TABLE 5 Business Details Pre-IPO Details Case study details BusinessName: A&B Inc. Product/s: Product-A (Category - Christmas Gifts) Productdetails: Weight - 200 g, Size - 12″ × 12″ × 4″, Photo etc. Cost priceper unit: $50 Proposed selling price (post-IPO): $80 + Shipping Sellingstrategy: Direct sale/(Auction) Why would the product sell for the(Optional, for the benefit of projected price? the angel and any futureinvestors) Market research summary: (Optional, for the benefit of theangel and any future investors) Projected total initial investment:$5000 + $800 (projected shipping estimate) Associated services that maybe Shipping required: Target Customer Demography: US Business span:Possible long-term (i.e., Contract extendible)

TABLE 6 Partnership Details Pre-IPO Details Case Study Details BusinessPlan Owner's $1000 Monetary investment: Monetary equivalent of $333.34 →60-40 profit split between the business plan: angel and entrepreneurEquity dilution model Uniform during IPO phase: Agreement expirationSale of 100 Nos. of Product-A date/criteria: Agreement renewable: YesInitial monetary 1.2 (Advantage bump that A enjoys for investmentadvantage initiating pre-IPO session vis-à-vis factor: any futuremonitory investors)

TABLE 7A IPO Details Pre-IPO Details Case Study Details IPO session 10days window: Whether Yes offers proxy equity stakes: Whether Yes offersequity stakes: Investment Direct $2000 (This is the difference betweenTypes List: Monetary projected initial investment and the investment:investment raised by angel and entrepreneur together) Threshold equityinvestment $1000 quantum: Early investor advantage 1.1 (Advantage factorfor early monitory factor: investors) Equity dilution model: UniformIndirect $800 (for shipping assuming 80 effective Monetary uniquecustomers/100 nos. of product-and investment: $10 per shipping based onproduct details) Threshold equity investment $800 quantum: Skilladvantage bump: 1.4 (Advantage factor for skill investor providing skillinputs) Proxy equity details: No. of products up for IPO 20/100 sale:Consumer Ips: 10 (Meaning subscribers are issued 10 Ips for beingcustomers. ‘Buying the product’ is an investment type action allowed inthis proxy store) Referral Ips: 6 (‘Direct referral’ is a recognizedinvestment type action in this proxy store. IP worth of this action is6.) IPO IP bump: 2X/(+X) (Advantage bump for subscribers performingrecognized investment type actions in IPO phase) Commission percentage:8%/(could be a range, say 10-6% linear) Product price in IPO sale:$80/(could be less than post-IPO sale price) Threshold proxy equity 1product (Minimal criteria for a subscriber to investment quantum: beconsidered a proxy-equity holder. In the case study, a subscriber whojust provides value to the business by way of referral is not consideredat the time of building Dynamid) First/subsequent business Sale of 100nos. of Product-A or two months, cycle length/s: whichever is earlier.(One month - subsequent) Proxy equity effective until: June 30, 2011Diminishing rate of proxy 0 (implies PE does not diminish until June 30,equity: 2011) Are External Ips effective: No (Meaning only the Ips fromlisted investment type actions for the proxy are considered whilebuilding Dynamid.) % of the product cost 30% expected as commitment:Early proxy investor 1 (Meaning all the proxy investors are treatedadvantage factor: equal in the IPO phase. No advantage provided to earlybirds.)

TABLE 7B Dynamid Details for IPO Parameter Type IPO Dynamid details CaseStudy Details 1 Sorting TIE_BREAKER_RULES Default (IPO subscribers aregiven priority) 2 NPI NEIGHBORHOOD 3 3 NPI NORMALIZATION_FUNCTIONDefault (k(x) = 1) 4 Dynamid DYNAMID_FRAME_WIDTH(W) 3 5 DynamidFLUID_SYNDICATE_STRUCTURE True (S = f) 6 Macro-levelBASE_COMPENSATION_DISTRIBUTION_LOGIC Equal justification 7 Macro-levelCOMPENSATION_CARRYOVER_THRESHOLD 2 justification 8 Macro-levelPERCENT_CARRYOVER_Lx (x< PERCENT_CARRYOVER_L1 = justificationCOMPENSATION_CARRYOVER_THRESHOLD) 30% PERCENT_CARRYOVER_L2 = 20% 9Micro-level PENALTY_QUANTUM_NEGATIVE −0.5 (of L1) justification 10Micro-level PENALTY_QUANTUM_POSITIVE  0.5 (of L1) justification 11Micro-level MICRO_JUSTIFICATION_STGY % BHU justification 12 Micro-levelBHU_PERCENT (if applicable) 50  justification 13 Micro-levelMINIMUM_COMPENSATION_FACTOR  0.4 justification 14 Micro-levelMAXIMUM_PENALTY_FACTOR  3.0 justification

Pre-IPO Step IV: Initiate IPO Phase (Actors—Angel & Entrepreneur)

There are two actions involved at this stage:

1. Initiate online marketplace of the partnership agreement details; 2.Publish business and IPO details in the online marketplace businessplatform.

Case Study—Pre-IPO: Step IV

At the end of pre-IPO phase, the situation stands thus:

a) A and B in partnership intend to launch an online ecommerce store inthe online marketplace that sells product-A. Their partnership ratio is60:40 (A:B).

b) Together they managed to pool $3000 and $2800 more is required whichthey intend to acquire through an online marketplace IPO.

c) To reduce risks involved and to arouse confidence in the IPOaudience, they intend to acquire customers before even launching thebusiness by setting a proxy store on the marketplace.

d) The actions are completed and the business pushed to the IPO phase onOct. 21, 2010.

IPO Phase of Collaborative Business Ownership Feature

In this phase, the initiators of the business share a business plan withthe entire subscriber base of the online marketplace and offer stakes(equity, proxy-equity or both) based on the criteria defined in Table 7Aand 7B (IPO details). Subscribers may respond to an IPO by way ofcounter proposal or bidding or by committing to invest (equityinvestment) as per the IPO proposal based on their individual perceptionof how the business plan will fare in the marketplace. Alternately,subscribers have the option to be proxy equity holders by investing incorresponding types such as committing to be customers of theto-be-launched business. In either case, subscriber investments to aproxy are channeled through individual subscriber owned meta-businesseson the marketplace. This lets the subscribers strategize and split theirinvestments between multiple proxies as per their individualsensibilities.

Steps involved in this phase:

1. Initiate IPO session; 2. Receive counter-proposals (in private) fromprospective investors; 3. Finalize partnership details; and 4. Initiatepost-IPO phase - or start online store and proxy store in the onlinemarketplace.

IPO Step I: Initiation (Actors—Angel & Entrepreneur)

IPO session started by business initiators is published on themarketplace business platform and subscribers learn of the IPO either bya push or a pull mechanism based on their individual preference.

Case Study—IPO: Step I

On Oct. 21, 2010 the business moves to the IPO phase where businessdetails and IPO details are made public on the marketplace.

IPO Step II & III: Receive Counter-Proposals and Finalize PartnershipDetails (Actors—Angel, Entrepreneur, Investors)

Subscribers (or investors) may respond to the IPO by sending counterproposals along with the investment types they are interested in. Again,interaction between IPO initiators and investors is expected to finalizeequity and proxy-equity allotment to investors.

Case Study—IPO: Step II & III

For the purpose of the case study, the investors agree to the proposalmade by the initiators of IPO. Equity and proxy-equity allotment duringthe case study IPO is as shown in the subsequent sections.

Case Study—IPO: Step II & III (Cont'd)—Equity Investment:

a) On Oct. 23, 2010, subscriber C commits to an equity investment of$1000. Effective monetary investment by the investors A:B:C stands as:2000:1333.34:833.34 (1000/1.2). Corresponding percentage ownership is:48:32:20.

b) On Oct. 25, 2010, subscriber D commits to an equity investment of$1000. Effective monetary investment by the investors A:B:C:D stands as2000:1333.34:833.34:757.58:(1000/1.2*1.1). Corresponding percentageownership is 40.6:27.1:16.9:15.4.

c) On Oct. 29, 2010, subscriber E commits to $800 of indirect monetaryinvestment (Skill investment: Shipping). Effective monetary investmentby the investors A:B:C:D:E stands as 2000:1333.34:833.34:757.58:771.4(800*1.4/1.2*1.1*1.1). Corresponding percentage ownership is35.1:23.4:14.6:13.3:13.6.

Case Study—IPO: Step II & III (Cont'd)—Equity Investment:

The equity ownership stakes of the business among five partners isfinalized as indicated above. In this case study, equity ownership ofpartners is calculated based on actual investment amount for simplicitysake, but the online marketplace may accomplish this by way of allottingIPs. However, the logic remains the same.

Case Study—IPO: Step II & III (Cont'd)—Proxy Equity Investment:

a) On Oct. 22, 2010, subscriber J commits to buying two units ofproduct-A, by actually paying 30% of the net payable which is $48(0.3×2×80). This amount is held by the online marketplace and refundedback if the business never gets launched from IPO phase or the businessowners express inability to deliver the product. Forty IPs are creditedto the IP account of subscriber J, applying a 2×IPO bump to 20 IPs hehas earned.

b) On Oct. 23, 2010, subscriber K commits to buying two units ofproduct-A. Forty IPs are credited to the IP account of subscriber K,applying 2×IPO bump to 20 IPs he has earned.

c) On Oct. 23, 2010, subscriber L, referred by subscriber J, commits tobuying one unit of product-A. Subscriber L is credited with 20 IPs andSubscriber J is credited with 12 (6*2) IPs

The total tally of IPs as of Oct. 23, 2010 is as follows: Subscriber—52;Subscriber K—40; and Subscriber L—20. Five of 20 units of product-Aavailable in the IPO are booked. The business has three unique customersand they were acquired before the business actually started.

Case Study—IPO: Step II & III (Cont'd)—Proxy Equity Investment:

Continuing this way, assume all 20 units of the product are sold in theIPO phase and the IP distribution pattern at the end of IPO phaseappears as shown in Table 8. For the sake of simplicity, external IPsare not considered; in other words, only the business proxy specificactions—consumer, and referral actions are awarded IPs in the examplecase study as specified in the policy-set.

TABLE 8 IP Distribution Subscriber IPs #Items #Referrals Subscriber J(L) 52 2 1 Subscriber K 40 2 0 Subscriber L (M) 20 1 0 Subscriber M (O)32 1 1 Subscriber N 40 2 0 Subscriber O 20 1 0 Subscriber P 20 1 0Subscriber Q (R) 32 1 1 Subscriber R (S) 44 1 2 Subscriber S (T, U) 56 13 Subscriber T (W, X) 64 2 2 Subscriber U (V) 20 1 0 Subscriber V(Y) 321 1 Subscriber W 20 1 0 Subscriber X 20 1 0 Subscriber Y 20 1 0

IPO Step IV: Initiate Post-IPO Phase (Actors—Entrepreneur, SkillProvider

The above steps complete the IPO phase and at the end of it, thesituation stands as follows:

1. Required capital for the business is raised, associated skillsacquired and the equity stakes defined among the partners of thebusiness; and 2. Initial customers for the business acquired andproxy-equity in the form of IPs allotted as proposed in the IPO.

In the case study, every action is assumed to be completed in a timelymanner and as per the expectations of the business initiators. However,this may not always occur and business initiators may take severaldecisions at the end of IPO phase such as

a) to extend the IPO time frame if insufficient equity or proxy-equitywas raised;

b) decide to start the business with whatever equity or proxy equity wasraised;

c) modify certain IPO attributes to make it more attractive to theprospective investors and extend the session window; or

d) rescind the business plan and make necessary refunds.

The online marketplace provides options to let the business initiatorstake any of the above decisions at the end of IPO phase.

Case Study—IPO: Step IV

In the case study, it is assumed every action is complete as per theexpectations of IPO initiators. The business is ready to be pushed tothe next phase by Oct. 31, 2010 and the collaborative online store alongwith corresponding proxy is opened in the online marketplace on Nov. 1,2010.

Post-IPO Phase of Collaborative Business Ownership Feature

The purpose of the IPO process would have been served by the time thepost-IPO phase starts, at least partially. So, it is time for conductingthe business, with the major initiative lying with the entrepreneur andthe skill providers (Shipper E in the case study).

Steps involved in this post-IPO phase include:

1. Initiate online store operation - fulfill proxy equity obligationsfirst; 2. First business cycle completion - Dynamid generation andsettling proxy equity stakes; 3. Periodic proxy equity settlement basedon IPO contract; and 4. Optional subsequent IPOs.

Post-IPO Step I: Initiation (Entrepreneur, Associated Skill Provider,Marketplace Engine)

The online business starts operations such as receiving online ordersand fulfilling them, like any other e-commerce store. Money generated bythe business from each online sale is split among equity investors asper the defined equity ratio towards the end of IPO phase. Also proxyequity obligations are handled on priority basis.

Case Study—Post-IPO: Step I

For each sale of product-A, the money is split as shown in Table 9. Thesale price of product-A is $80 plus shipping costs. The proxy equityshare (customer commission) on each sale is 8% of the product price,which goes into proxy equity pocket after each sale.

TABLE 9 Equity Shares in Post-IPO phase Proxy Equity $6.4 [Proxy equityshare → 8% of product sale Account price] A's share $28.28 [$20 +$(0.351 * 23.6)] B's share $15.52 [$10 + $(0.234 * 23.6)] C's share$13.44 [$10 + $(0.146 * 23.6)] D's share $13.13 [$10 + $(0.133 * 23.6)]E's share $11.20 [$8 + $(0.136 * 23.6)]

Case Study—Post-IPO: Step I (Cont'd)

Assuming all 100 units of product-A are sold for $80 each by Dec. 25,2010, the net tally is as shown in Table 10.

TABLE 10 Net Equity Shares Shareholder Investment Final earnings PEA NA$640 A 2000 $2828 B 1000 $1552 C 1000 $1344 D 1000 $1313 E 800 $1120

Case Study—Post-IPO: Step I (Cont'd)

The proxy equity account indicates what is returned to the consumers atthe time of proxy equity (IP) settlement elaborated in subsequentsections using the Dynamid algorithm. Though this demonstration isspecific to a primary market scenario in the online marketplace, thesettlement methodology remains same in case of ecommerce proxy startedin the online marketplace directly (bypassing the IPO) or proxy of anexisting online business or businesses that are not online.

Post-IPO Step II: First Business Cycle Completion (Actors—MarketplaceDynamid Algorithm)

In this step, proxy equity settlement is accomplished using the Dynamidalgorithm of the online marketplace. Details of the Dynamid algorithmare elaborated in the Dynamid section. Configuration parameters requiredto generate Dynamid are selected from the proxy policy-set specified aspart of IPO details (Table 7B).

Case Study—Post-IPO: Step II

For the case study, a possible Dynamid output is described todemonstrate how proxy equity settlement is accomplished at the end offirst business cycle. Subsequent cycles also follow much the same logic,with minor variations. By Dec. 25, 2010 all 100 units of product of thebusiness A&B Inc are sold and Table 11 shows a snap shot of the proxyequity holding of the customer base (in descending order of IPs).

TABLE 11 Proxy Equity Holding of Customer Base for First Business Cycle#items SNo. Customer IPs purchased 1 Sub 1 68 5 2 T 64 2 3 S 56 1 4 Sub2 54 3 5 J 52 2 6 R 44 1 7 Sub 3 42 3 8 K 40 2 9 N 40 2 10 Sub 4 38 2 11Sub 5 34 1 12 Sub 6 34 1 13 M 32 1 14 Q 32 1 15 V 32 1 16 Sub 7 32 2 17Sub 8 32 2 18 Sub 9 26 2 19 Sub 10 22 1 20 Sub 11 22 1 21 Sub 12 22 1 22L 20 1 23 O 20 1 24 P 20 1 25 U 20 1 26 W 20 1 27 X 20 1 28 Y 20 1 29Sub 13 20 2 30 Sub 14 20 2 31 Sub 15 20 2 32 Sub 16 20 2 33 Sub 17 20 234 Sub 18 20 2 35 Sub 19 20 2 36 Sub 20 20 2 37 Sub 21 20 2 38 Sub 22 202 39 Sub 23 20 2 40 Sub 24 20 2 41 Sub 25 20 2 42 Sub 26 20 2 43 Sub 2720 2 44 Sub 28 16 1 45 Sub 29 16 1 46 Sub 30 16 1 47 Sub 31 16 1 48 Sub32 10 1 49 Sub 33 10 1 50 Sub 34 10 1 51 Sub 35 10 1 52 Sub 36 10 1 53Sub 37 10 1 54 Sub 38 10 1 55 Sub 39 10 1 56 Sub 40 10 1 57 Sub 41 10 158 Sub 42 10 1 59 Sub 43 10 1 60 Sub 44 10 1 61 Sub 45 10 1 62 Sub 46 101 63 Sub 47 10 1 64 Sub 48 10 1 65 Sub 49 10 1 66 Sub 50 10 1 67 Sub 5110 1 68 Sub 52 10 1 69 Sub 53 10 1

Case Study—Post-IPO: Step II (Cont'd)

Configuration parameters required to generate Dynamid are picked fromthe proxy policy-set specified as part of IPO details (Table 7B). Theproxy equity account of $640 is settled among the proxy equity holdersas shown in Table 12, which is the final output of Dynamid algorithm.Percent Benefit Higher Ups (% BHU) in the table header below refers tothe strategy used while generating Dynamid.

TABLE 12 Compensation Distribution Using (50) % BHU StrategyCompensation (50 SNo Customer % BHU) in $ 1 Sub 1 $55.71 2 T $55.71 3 S$29.51 4 Sub 2 $27.96 5 J $27.96 6 R $24.78 7 Sub 3 $24.78 8 K $18.09 9N $14.25 10 Sub 4 $14.25 11 Sub 5 $8.23 12 Sub 6 $8.23 13 M $8.23 14 Q$8.23 15 V $8.23 16 Sub 7 $8.23 17 Sub 8 $8.23 18 Sub 9 $8.23 19 Sub 10$8.23 20 Sub 11 $8.23 21 Sub 12 $8.23 22 L $8.23 23 O $8.23 24 P $8.2325 U $8.23 26 W $8.23 27 X $6.98 28 Y $6.28 29 Sub 13 $5.94 30 Sub 14$5.76 31 Sub 15 $5.68 32 Sub 16 $5.63 33 Sub 17 $5.61 34 Sub 18 $5.60 35Sub 19 $5.59 36 Sub 20 $5.59 37 Sub 21 $5.59 38 Sub 22 $5.59 39 Sub 23$5.59 40 Sub 24 $4.66 41 Sub 25 $4.66 42 Sub 26 $4.66 43 Sub 27 $4.66 44Sub 28 $4.66 45 Sub 29 $4.66 46 Sub 30 $4.66 47 Sub 31 $4.66 48 Sub 32$4.66 49 Sub 33 $4.66 50 Sub 34 $4.66 51 Sub 35 $4.66 52 Sub 36 $4.66 53Sub 37 $4.66 54 Sub 38 $4.66 55 Sub 39 $4.66 56 Sub 40 $4.66 57 Sub 41$4.66 58 Sub 42 $4.66 59 Sub 43 $4.66 60 Sub 44 $4.66 61 Sub 45 $4.66 62Sub 46 $4.66 63 Sub 47 $4.66 64 Sub 48 $4.66 65 Sub 49 $4.66 66 Sub 50$4.66 67 Sub 51 $4.66 68 Sub 52 $4.66 69 Sub 53 $4.66

Case Study—Post-IPO: Step II (Cont'd)

Note the skew in the compensation distribution, with the top 12customers (proxy equity holders) of A&B Inc claiming approximately 50%of the proxy equity account. This result was deliberately introducedinto the Dynamid generation algorithm by using a % BHU strategy whichsuits the IPO scenario in the online marketplace. Other strategiespossible are BHU (Benefit Higher Ups), BLD (Benefit Lower Downs), or BAL(Balanced). Different strategies for Dynamid generation are discussed inthe Dynamid section. Table 13 below shows the compensation distributionusing BAL strategy to illustrate the difference between strategies.

TABLE 13 Compensation Distribution Using BAL Strategy Comp (BAL) SNoCustomer in $ 1 Sub 1 $36.22 2 T $36.22 3 S $27.41 4 Sub 2 $25.81 5 J$25.81 6 R $21.89 7 Sub 3 $21.89 8 K $15.89 9 N $14.89 10 Sub 4 $14.8911 Sub 5 $8.93 12 Sub 6 $8.93 13 M $8.93 14 Q $8.93 15 V $8.93 16 Sub 7$8.93 17 Sub 8 $8.93 18 Sub 9 $8.93 19 Sub 10 $8.93 20 Sub 11 $8.93 21Sub 12 $8.93 22 L $8.93 23 O $8.93 24 P $8.93 25 U $8.93 26 W $8.93 27 X$7.93 28 Y $7.24 29 Sub 13 $6.89 30 Sub 14 $6.71 31 Sub 15 $6.63 32 Sub16 $6.58 33 Sub 17 $6.56 34 Sub 18 $6.55 35 Sub 19 $6.55 36 Sub 20 $6.5437 Sub 21 $6.54 38 Sub 22 $6.54 39 Sub 23 $6.54 40 Sub 24 $5.61 41 Sub25 $5.61 42 Sub 26 $5.61 43 Sub 27 $5.61 44 Sub 28 $5.61 45 Sub 29 $5.6146 Sub 30 $5.61 47 Sub 31 $5.61 48 Sub 32 $5.61 49 Sub 33 $5.61 50 Sub34 $5.61 51 Sub 35 $5.61 52 Sub 36 $5.61 53 Sub 37 $5.61 54 Sub 38 $5.6155 Sub 39 $5.61 56 Sub 40 $5.61 57 Sub 41 $5.61 58 Sub 42 $5.61 59 Sub43 $5.61 60 Sub 44 $5.61 61 Sub 45 $5.61 62 Sub 46 $5.61 63 Sub 47 $5.6164 Sub 48 $5.61 65 Sub 49 $5.61 66 Sub 50 $5.61 67 Sub 51 $5.61 68 Sub52 $5.61 69 Sub 53 $5.61

Post-IPO Step III: Periodic Proxy Equity Settlement Based on IPOContract (Actors—Marketplace Dynamid Algorithm)

As the online store—along with its proxy—continues to operate in theonline marketplace, proxy equity settlement is periodically accomplishedas per the policy-set specification of the proxy. The contract betweenthe business (equity) shareholders expires with the completion of thefirst business cycle. The primary owner of the business (B in the casestudy) may then decide to either continue or terminate the business.However, if the business continues, the proxy equity holders retaintheir IP advantage until it expires (Jun. 30, 2011 in the case study).Further, the policy-set may be modified to alter the compensationdistribution pattern during subsequent settlements as per the discretionof primary business owner based on the owner's business objectives.

Post-IPO Step IV: Optional Subsequent IPOs (Actors—Entrepreneur)

The IPO phase may be initiated as many times as is required by businessowners in the online marketplace. Business owners may bypass the IPOphase but still choose to retain corresponding business proxy, whichwould, in that case, serve as a sales channel in the online marketplace.

Note—Collaborative Business Ownership

Online marketplace supports all the actions defined in the above stepsby providing the necessary screens, data storage and data flowmechanisms. The online marketplace may also be implemented to charge forenabling the entire IPO process.

Dynamid Concept

A Dynamid (dynamic pyramid) represents a subscriber compensationdistribution pattern of a given business proxy in a given business cyclein the online marketplace. It may be viewed as a generalization of aclassical MLM pyramid in the context of online marketplace. Adistinguishing factor of a Dynamid from a classical MLM pyramid is thatit is generated dynamically from a flat online marketplace subscriberbase purely on the online marketplace criteria. The matrix shown inTable 14 summarizes the differences between MLM pyramid and Dynamid.

TABLE 14 Dynamid Frame and Node Attributes No. Classical MLM PyramidDynamid 1 Customer positioning in pyramid is static. Customers aredynamically positioned in a Dynamid at the time of building it. Dynamidsare built afresh whenever required and dismantled completely once theirpurpose is served. 2 Parent-child relationship once defined Parent-childrelationship between two nodes in a between two particular nodes in anMLM Dynamid is scoped by business cycle. It is pyramid is final andnever gets altered. possible for the nodes to switch places insubsequent business cycles. 3 Parent-child relationship is strictlyone-to- Multiple parentage is possible in a Dynamid; many in a classicalMLM pyramid. meaning, commission component from a Dynamid node could bedistributed between more than one nodes as dictated by the algorithm. 4Referrals form the entire basis for erecting Multiple ways available forcustomers to an MLM pyramid. contribute to businesses are tapped whilebuilding a Dynamid. Technological advances are exploited to enable this.5 ‘Sense of justification’ of the rationale to To establish a ‘sense ofjustification’ in case of build pyramids based on referrals, fromDynamid is a bit complex. This is achieved at customer's perspective, istrivial. multiple levels, explained below as part of the algorithmdescription. Justification at three levels (macro, micro & final) isdemonstrated in subsequent sections.

In the context of collaborative business ownership on the marketplace,the Dynamid algorithm may be applied for both equity and proxy-equitysettlements. In an example embodiment, a social networking community onthe marketplace may start an online store in which each member investsin terms of money, skill or services according to his or hercapabilities, grabbing equity or proxy-equity stakes, while the Dynamidalgorithm handles the compensation distribution aspect.

Dynamid Generation Algorithm

Dynamid Generation—Inputs Required for Dynamid Generation

1. Subscriber IP(proxy-equity) distribution profile; and 2. Policy-setof the Business Proxy that define various attributes of to-be-generatedDynamid.

Case study used for demonstrating collaborative business ownershipconcept using IPO on the marketplace is extended to represent Dynamidgeneration as well. The inputs used for the fictitious Dynamidgeneration case study are in Table 11 and Table 7B.

FIG. 2A illustrates a flowchart that depicts compensation distributionprocess on the marketplace. In particular, a Dynamid generation processis described. Each of these steps involved in Dynamid generation areexplained in subsequent sections. Case study specific output from eachalgorithm step can be seen in FIGS. 2B and 2D.

Dynamid Generation Steps

Step 1 (200): Arrange IP distribution in descending order of IPs.

Required IP distribution (of size = t); input: Tie-breaker rules in theProxy policy-set Process: Arrange subscriber profiles in descendingorder of IPs. Tie breaker rules are specified in the policy-set of thebusiness proxy. Default tie-breaker rule in case none specified in thepolicy-set is based on the subscriber's seniority in the onlinemarketplace. Output: IP distribution sorted in descending order. Eachsubscriber is assigned a rank from 1 to ‘t’ in the IP distribution. Anarray of nodes [Rank(X), IP(X)] for subscriber X.

Case Study: Step 1

Input: IP distribution in Table-11 (t = 69) Tie-breaker rules - Default(implies IPO users are given precedence) Process: Arrange subscriberprofiles in descending order of IPs. Use default tie breaker rules.Output: IP distribution in descending order - [(1, 68), (2, 64), (3,56), (4, 54), (5, 52), (6, 44), (7, 42), (8, 40), (9, 40), (10, 38) . .. (69, 10)]

Step 2 (202): Calculate Neighborhood Performance Index (NPI) for eachsubscriber.

Understanding NPI(x):

While the rank arrived at in Step 1 represents the position of asubscriber with respect to the entire IP distribution, the NPI valuerepresents the status of a subscriber in the defined neighborhood.NPI(x)>1 implies the associated subscriber is nearer to the higher endof IP spectrum in the defined neighborhood and vice versa. A highervalue of NPI indicates a better performance of the respective subscriberin the defined neighborhood. Rank represents the IP performance of asubscriber at a macro-level while NPI represents IP performance atmicro-level.

Re- Sorted IP distribution, Integer neighborhood value from the quiredProxy policy-set. input: Proc- NPI for each subscriber is calculatedusing the following formula- ess:  ${{NPI}\left( {x,n} \right)} = \frac{{{IP}(x)} - {{AVG}\left\lbrack {{{IP}\left( {x + 1} \right)},{{IP}\left( {x + 2} \right)},{\ldots \mspace{14mu} {{IP}\left( {x + n} \right)}}} \right\rbrack}}{{{AVG}\left\lbrack {{{IP}\left( {x - 1} \right)},{{IP}\left( {x - 2} \right)},{\ldots \mspace{14mu} {{IP}\left( {x - n} \right)}}} \right\rbrack} - {{IP}(x)} + 1}$ where n is neighborhood and x is any given subscriber  and,  NPI(1, n)= MAX[NPI(2, n), NPI(3, n), . . .]  And if NPI(x1, n) = 0,  NPI(x1, n) =MIN[NPI(2, n), NPI(3, n), . . .]/2 Out- NPI values calculated for eachsubscriber for a defined put: neighborhood.

Case Study: Step 2

Input: IP distribution in descending order - [(1, 68), (2, 64), (3, 56),(4, 54), (5, 52), (6, 44), (7, 42), (8, 40), (9, 40), (10, 38) . . .(69, 10)] Neighborhood = 3; from proxy policy set. Process: Sample:NPI(6, 3) = (44 − (42 + 40 + 40)/3)/((56 + 54 + 52)/3 − 44 + 1) =0.3030302 Output: NPI values - [(1, 8.6666), (2, 2.0000), (3, 0.5454),(4, 0.8275), (5, 1.4285), (6, 0.3030302) . . . (69, 0.0370)]

Step 3 (204): Normalize Neighborhood Performance Index (NPI) for eachsubscriber (Calculate NNPI for each subscriber).

Understanding NNPI(x):

NPI values calculated in the previous step are valid within respectiveneighborhoods that are different for each subscriber and hence cannot becompared to each other, whereas NNPI values bring the indices to acommon scale to enable comparison. A default normalization factoraccomplishes this to an extent while further degree of normalization maybe enforced by the normalization function k(x).

Required NPI values for each subscriber in the IP distribution, input:Normalization function in the Proxy policy-set. Process NNPI iscalculated using the following formula - NNPI (x) = NPI(x) × [(t + 1) −Rank(x)]/t × k(x) where [(t + 1) − Rank(x)]/t is the defaultnormalization factor and k(x) is proxy specific normalization functionthat further augments the default normalization factor. Examples couldbe 1/Rank(x) or Percentile(x)/100 etc. If none specified, k(x) = 1.Output: NNPI values calculated for each subscriber

Case Study: Step 3

Input: NPI values - [(1, 8.6666), (2, 2.0000), (3, 0.5454), (4, 0.8275),(5, 1.4285), (6, 0.3030302) . . . (69, 0.0370)] k(x) = 1 (by default)Process Sample - NNPI(6) = (0.30303) * (70 − 6)/69 = 0.28107 (with t =69 & k(x) = 1) Output: NNPI values - [(1, 8.6666), (2, 2.0000), (3,0.5454), (4, 0.8275), (5, 1.4285), (6, 0.2810) . . . (69, 0.0370)]

Step 4 (206): Transform NNPI(x) for each subscriber (Calculate TNPIvalues for each subscriber).

Understanding TNPI(x):

Although NNPI values calculated in the previous step are mapped to acommon scale; comparison is difficult as the values are not bounded.Transformation of NNPI values help in confining the neighborhoodperformance indices of all the subscribers to the range (−1, 1) thusfacilitating comparison and finally applying the Dynamid generationrules to the IP distribution (in subsequent steps). Positive TNPI valueimplies ‘good’ IP performance in the defined neighborhood with thesubject's IP value nearer to the upper end of IP distribution in theneighborhood. Likewise a negative value implies subject's IP is nearerto the lower end of IP spectrum in the neighborhood

Required NNPI values for each subscriber in the IP distribution input:Process: TNPI is calculated using the following formula - if (NNPI(x) >1){ TNPI(x) = 1 − 1/NNPI(x); } else{ TNPI(x) = NNPI(x) − 1; } Output:TNPI values calculated for each subscriber.

Case Study: Step 4

Input: NNPI values - [(1, 8.6666), (2, 2.0000), (3, 0.5454), (4,0.8275), (5, 1.4285), (6, 0.2810) . . . (69, 0.0370)] Process Sample -TNPI (6) = (0.28107 − 1) = −0.71893 Output: TNPI values - [(1, 0.8846),(2, 0.4926), (3, −0.4703), (4, −0.2084), (5, 0.2569), (6, −0.7189) . . .(69, −0.9994)]

Case Study: Step 4 (Con't.)

Refer to FIG. 3 for a line chart plotting TNPI values for the examplecase study where t=69.

Step 5 (208): Identify Dynamid Frame attributes for the IP distribution.

Understanding Dynamid Frame:

Dynamid frame for a given IP distribution of size ‘t’ is a collection ofT number of three dimensional node representations (d, p, w) eachcorresponding to a subscriber in the distribution. Integer values of D(depth), W (width), N (top nodes) are considered primary Dynamid frameattributes. There is yet another secondary frame attribute ‘S’ whichassists Dynamid frame generation when the IP distribution contains oneor more composite entities. A composite entity in an IP distribution isa pre-defined syndicate structure of subscribers built outside the scopeof Dynamid algorithm of online marketplace. For example, if the businessproxy in question is associated to an MLM business with an existingstatic pyramid structure and prefers not to disturb the pyramid at thetime of Dynamid generation, the value of ‘S’ may be set to ‘p—PredefinedSyndicate Structure’. Otherwise the default value of ‘S’ (f—FluidSyndicate Structure) may be considered while generating Dynamid—in whichcase the syndicate is decomposed to individual subscriber level beforegenerating the Dynamid. Thus, a Dynamid frame may be represented by thefour attributes as [D,W,N,S]. Dynamid frame and node attributes aresummarized in Table 15. Convenient math pertaining to Dynamid framegeneration from the attributes is summarized in Table 17.

TABLE 15 Dynamid Frame and Node Attributes D Frame Attribute depth ofDynamid Frame d Node Attribute depth/level indicator of the node; valueε {1, 2, . . . D}. W Frame Attribute width of the Dynamid frame w NodeAttribute width indicator of the node; value ε {1, 2 . . . W} N FrameAttribute number of top nodes of the Dynamid frame p Node Attributeparent absolute position indicator of the node; value ε {1, 2 . . .N*W^((d−2))} S Frame Attribute determines if composite entities areallowed while generating Dynamid frame or not. Allowed values - ‘p’ or‘f’

For example, [5, 4, 1, f] Dynamid frame has the following nodes depictedin Table 16. In this example, had the value of N been 2, Level 1 wouldcontain two nodes (1, 0, 1) and (1, 0, 2) and each of these top levelnodes would have similar structure as shown, in effect doubling thenumber of total nodes.

TABLE 16 Example Dynamid Frame Nodes Level 1 - (1, 0, 1) Level 2 - (2,1, 1) (2, 1, 2) (2, 1, 3) (2, 1, 4) Level 3 - (3, 1, 1) (3, 1, 2) (3, 1,3) (3, 1, 4) | (3, 2, 1) (3, 2, 2)(3, 2, 3)(3, 2, 4) | (3, 3, 1)(3, 3,2)(3, 3, 3)(3, 3, 4) | (3, 4, 1)(3, 4, 2)(3, 4, 3)(3, 4, 4) Level 4 -(4, 1, 1)(4, 1, 2) . . . (4, 16, 3)(4, 16, 4) Level 5 - (5, 1, 1)(5, 1,2) . . . (5, 64, 3)(5, 64, 4)

TABLE 17 Convenient Math Pertaining to Dynamid Frames Total number ofnodes in a T[D, W, N, S] = N X [{i = Dynamid frame [D, W, N, S] 1 → D} ΣW^((I−1))] Immediate child nodes of a ((x + 1), ((y − 1)XW + z), DynamidNode (x, y, z) in {1, 2 . . . W}) [D, W, N, S] Direct parent of Dynamidnode ((x − 1), [y/W] + 1, (y % W)) if x > 2 (x, y, z) in [D, W, N, S]((x − 1), 0, (y % W)) if x = 2

Thus, to generate a Dynamid frame, four attributes D, W, N, S arerequired. Two out of the four attributes (W and S) are directly readfrom the policy-set of proxy while the other two are inferred in thisstep. Note these attributes are used to generate ‘Dynamid Frame’; theactual Dynamid is built when the subscribers are mapped to the nodes ofthe frame.

TABLE 18 Dynamid Frame Attributes W Width of the Dynamid frame orMaximum number of child nodes allowed in a Dynamid (note: not theframe.). This value is set by the proxy based on its business objectivesin the online marketplace. For example, a higher value of W isattractive for initial customers (perhaps, in an IPO in the onlinemarketplace) while not so attractive for newcomers once sufficientconsumer base is built. Recommended value for W in the onlinemarketplace is between 3 and 6. Default value is 4. S If there arecomposite entities in the IP distribution and if the business proxyintends to retain pre-defined syndicate structure while generatingDynamid, the value of S is ‘p’. Default value is ‘f’ - in which case allthe entities in the IP distribution are considered fine- grainedentities (individual subscribers). N Number of top nodes is either setby online marketplace admin empirically based on IP distribution size‘t’ or inferred by the following formula - N = Max [Number of upperoutliers in IP distribution, Number of entities before first crossoverfrom positive TNPI to negative TNPI values in TNPI plot] Number of upperoutliers in IP distribution is the number of subscribers in thedistribution whose IP values are more than [Upper Quartile + b (InterQuartile Range)] for a value of ‘b’ set by online marketplace admin.Default value of b is 1.5. D Depth of Dynamid depends on the size of IPdistribution ‘t’ such that T[(D − 1), W, N, S] < t < T[D, W, N, S]Required TNPI values for each subscriber in the IP distribution, Dynamidattributes (W and input: S) from Proxy policy-set. Process: Infer thevalues of D & N from the IP distribution based on the logic elaboratedabove in Table 18. Output: All the Dynamid frame attributes read orinferred.

Case Study: Step 5

Case Study: Step 5 Input: TNPI values - [(1, 0.8846), (2, 0.4926), (3,−0.4703), (4, −0.2084), (5, 0.2569), (6, −0.7189) . . . (69, −0.9994)]Width of Dynamid Frame = 3 Fluid syndicate structure = true (S = ‘f‘)Process: Infer value of N - a) Calculate number of outliers in IPdistribution Upper Quartile(UQ) = 32 Lower Quartile(LQ) = 10 InterQuartile Range(IQR) = UQ − LQ = 32 − 10 = 22 UQ + 1.5 (IQR) = 65 Numberof subscribers with IP value more than 65 = 1 b) From the TNPI plot inFIG. 3, number of entities before first crossover from positive TNPI tonegative TNPI = 2 Thus, N = Max[1, 2] = 2 Calculate D - T[3, 3, 2, f] <69 < T[4, 3, 2, f] [W = 3 and S = f from policy-set] Hence D = 4.Output: D = 4; W = 3; N = 2; S = f

Step 6 (210): Generate Dynamid frame and default map subscribers to itin order.

Required Dynamid frame attributes, IP distribution input: Process:Generate three dimensional node representations (d, p, w) for Dynamidnodes based on the attributes calculated in the above step and mathdepicted in Table 17. Then map the node representations to subscribersin the IP distribution in descending order of IPs. Ignore noderepresentations that have no subscribers to be mapped. Output: Dynamidnode representation for all the subscribers in the IP distributioncalculated. In other words, all the subscribers are positionedappropriately in the Dynamid frame generated.

Case Study: Step 6

Input: Dynamid frame attributes; D = 4; W = 3; N = 2; S = f IPdistribution in descending order. Process: Generate Dynamid frame fromthe attributes identified in previous step. Necessary math is depictedin Table 17 Map subscribers to Dynamid frame nodes in descending order.Output: Dynamid Frame generated and all the subscribers are mapped toDynamid nodes. Refer Table 19.

TABLE 19 Dynamid Node Representation of Subscribers Dynamid Nodes (d, p,w) Customer IPs (1, 0, 1) S1 68 (1, 0, 2) T 64 (2, 1, 1) S 56 (2, 2, 1)S2 54 . . . . . . . . . (4, 16, 3) S52 10 (4, 2, 3) S53 10

Step 7 (212): Accomplish Macro-level justification—Derive child Dynamidsfor each node and calculate default compensation for each subscriber.

Understanding Macro-Level Justification:

Macro-level justification of compensation distribution is accomplishedbased on the respective positions of subscribers with respect to theentire IP distribution. Default compensation calculated in this step maybe viewed as a function of a subscriber's rank: the higher the rank, thehigher is the default compensation. Subsequent steps factor in the microlevel performance of each subscriber (TNPI values calculated in Step 4)to calculate multi-level justified final compensation for eachsubscriber.

Required Dynamid node representations of all the subscribers in IPdistribution, Proxy input: policy set (values for‘Base_Compensation_Distribution_Logic’,‘Compensation_Carryover_Threshold’, ‘Percent_Carryover’ for each level),Proxy Equity Account. Process: Proxy Equity Account is distributed amongthe subscribers in the IP distribution as specified by‘Base_Compensation_Distribution_Logic’ attribute of the policy- set.Then, child nodes for each Dynamid node are derived based on the mathdepicted in Table 17 until ‘Compensation_Carryover_Threshold’ level.Then default compensation for each subscriber is calculated based on‘Percent_Carryover’ values for each level. Output: Default compensationis calculated for all the Dynamid node representations following theprocess shown.

Case Study: Step 7

Input: Dynamid node representations for all subscribersBASE_COMPENSATION_DISTRIBUTION_LOGIC = EqualCOMPENSATION_CARRYOVER_THRESHOLD = 2 PERCENT_CARRYOVER_L1 = 30%PERCENT_CARRYOVER_L2 = 20% Proxy Equity Account = $640 Process: Eachsubscriber is initially allotted the base compensation of $640/69 =$9.27 Generate child dynamids for all the nodes to a maximum of 2 levelsas suggested by ‘COMPENSATION_CARRYOVER_THRESHOLD’ attribute. Samplechild dynamid generation is depicted in Table 20. Calculate defaultcompensation for each node (subscriber) by implementing percentcompensation carryover as depicted in Table 21. Output: Defaultcompensation calculated for all nodes (Subscribers). Refer Table 22.

TABLE 20 Sample Child Dynamid for node (1, 0, 1) L0 (1, 0, 1) L1 (2,1, 1) (2, 1, 2) (2, 1, 3) L2 (3, 1, 1) (3, 1, 2) (3, 1, 3) (3, 2, 1) (3,2, 2) (3, 2, 3) (3, 3, 1) (3, 3, 2) (3, 3, 3)

This is the child Dynamid generated for the Dynamid Node (1, 0, 1) for avalue of Compensation_Carryover_Threshold=2 (refer Dynamid math depictedin Table 17)

TABLE 21 Sample Default Compensation Calculation L0 - (1, 0, 1) $9.27(no parents to this node, so no deductions) L1 - (2, 1, 1) (2, 1, 2) (2,1, 3) $9.27 × 0.3 × 3 = $8.35 L2 - (3, 1, 1) . . . (3, 3, 3) $9.27 × 0.2× 9 = $16.69 Total: $34.31

For the values of ‘Percent_Carryover_L1’=30 and‘Percent_Carryover_L2’=20, default compensation for the subscriber (S1)with Dynamid node representation (1, 0, 1) is calculated as shown.

TABLE 22 Subscriber Compensation SUB 1 $34.31 T $34.31 S $29.68 SUB 2$27.82 J $27.82 . . . . . . SUB 52 $4.63 SUB 53 $4.63

Step 8 (214): Apply Dynamid rules and calculate penalties.

Required TNPI values for each subscriber in the IP distribution, input:Penalty calculation rules, Penalty quantum from Proxy Policy-set.Process: TNPI values represent local performance of the subscribers indefined neighborhood on a normalized and bounded scale and hence can becompared. A positive value of d = TNPI(X) − TNPI(X + 1) implies X + 1 isresponsible for bringing down the average IP value in the neighborhoodand is penalized. The greater the difference, the greater the penalty.Similarly, if the value is negative, X is penalized based on themagnitude of difference. Thus, based on the magnitude of differencebetween the TNPI values of consecutive neighbors, penalties for eachsubscriber are derived in this step. Note that the penalties arecalculated but not applied in this step. A sample penalty rule set isdepicted in Table 23 which is used for the case study purpose. The rules(ranges) are empirically arrived at and are dependent on the way TNPIvalues are calculated (the functions used to normalize and transform NPIvalues). These may be fine tuned as more and more data becomesavailable. Note the value TNPI(X) − TNPI(X + 1) is bounded by (−2, 2).Output: Penalties calculated for all the subscribers

TABLE 23 Penalty Calculation Rules SI. No. Condition Consequence PenaltyMagnitude 1  −2 < d <= −1.5 Penalize X 4 X NEG_PENALTY 2 −1.5 < d <= −1 Penalize X 3 X NEG_PENALTY 3  −1 < d <= −0.5 Penalize X 2 X NEG_PENALTY4 −0.5 < d <= −0.2 Penalize X 1 X NEG_PENALTY 5  −0.2 < d <= −0.05 DONOTHING NONE 6 −0.05 < d <= 0.05  Make (x + 1) on par with x (if Averageout already not) 8 0.05 < d <= 0.2  DO NOTHING NONE 9 0.2 < d <= 0.5Penalize (X + 1) and cascade 1 X POS_PENALTY penalty in that level. 100.5 < d < 1    Penalize (X + 1) and cascade 2 X POS_PENALTY penalty inthat level. 11  1 < d < 1.5 Penalize (X + 1) and cascade 3 X POS_PENALTYpenalty in that level. 12 1.5 < d < 2    Penalize (X + 1) and cascade 4X POS_PENALTY penalty in that level.

Note that in case of a negative difference, only X is penalized whereasthe penalty is cascaded from X+1 downwards in that depth level when thedifference is positive.

Case Study: Step 8

Input: TNPI values - [(1, 0.8846), (2, 0.4926), (3, −0.4703), (4,−0.2084), (5, 0.2569), (6, −0.7189) . . . (69, −0.9994)]PENALTY_QUANTUM_NEGATIVE = −0.5 (of L1) PENALTY_QUANTUM_POSITIVE = 0.5(of L1) Penalty calculation rules. Refer Table 23 Process: Calculate d =TNPI(X) − TNPI(X + 1) for each subscriber where X is the rank. For eachsubscriber, identify the rule applicable from rule table based on thevalue ‘d’ and identify respective penalty magnitudes. Output: Calculatepenalties for all the subscribers. Refer Table 24.

TABLE 24 Case Study Penalty Calculations SUB 1 0 T 0 S −0.5 SUB 2 −0.5 J1 . . . . . . SUB 52 0 SUB 53 0

Step 9 (216): Accomplish Micro-Level justification—Apply Penalties usingchosen strategy

Required Penalties calculated for each subscriber in the IPdistribution, input: Strategy details from Proxy‘s Policy-Set -MICRO_JUSTIFICATION_STRATEGY, BHU_PERCENT, MAX_PENALTY_FACTOR andMIN_COMPENSATION_FACTOR Process: Based on number of children in theChild Dynamid of a given node X, compensation penalty to be applied isnormalized for each subscriber using the following formula (Rationale -Penalty applied to subscriber with more default compensation to be morethan that applied to a subscriber, say, in the bottom most level with nochildren when the penalty magnitude identified in the previous sectionis same for both) - normalizedPenaltyFactor(x) = MAX_PENALTY_FACTOR X(ChildCount(x) − Min_Child_Count) + (Max_Child_Count − ChildCount(x))(Max_Child_Count − Min_Child_Count) where Max_Child_Count andMin_Child_Count are maximum and minimum child count of subscribers inthe entire IP distribution. Then actual compensation penalty for eachsubscriber is calculated using the following formulae -CompensationPenalty (x) = | normalizedPenaltyFactor(x) X [Penalty(x) XBaseCompensation X PERCENT_CARRYOVER_L1] | where [Penalty(x) XBaseCompensation X PERCENT_CARRYOVER_L1] is nothing but the penaltymagnitude calculated in the previous step multiplied by L1 worth.Absolute value of CompensationPenalty (x) is the amount to be deductedfrom the Default Compensation value for each subscriber (calculated instep 7). While deducting the CompensationPenalty (x), it must be ensuredthat none of the subscribers get less than (MIN_COMPENSATION_FACTOR XBaseCompensation) Penalty deductions are made; what remains is todistribute the ‘Penalty Account’ [ΣCompensationPenalty(x)] back to theIP distribution following micro-justification strategy of the Proxy fromits Policy-Set. Possible strategies are BHU (Benefit Higher Ups), BLD(Benefit Lower Downs), BAL (Balanced) and % BHU (Partly BHU). IfMICRO_JUSTIFICATION_STRATEGY = “BHU”, CompensationPenalty(x) value ofeach subscriber is divided equally between all the entities in thesubscriber’s parent hierarchy. If MICRO_JUSTIFICATION_STRATEGY = “BAL”,The entire penalty account is divided equally among all the subscribersin the IP distribution. If MICRO_JUSTIFICATION_STRATEGY = “BLD”, Penaltyaccount is divided between all the depth levels of the Dynamid frame inthe proportion of (Level X Number Of subscribers in the level) and allthe subscribers in a given level are equally credited with the penaltyaccount component for that level. If MICRO_JUSTIFICATION_STRATEGY = “%BHU”, BHU_PERCENT of penalty account is distributed using BHU strategyand the rest using BAL strategy. If BHU_Percent = 100, this is same asBHU and if BHU_Percent = 0, this is same as BAL strategy. Note: BLDstrategy is mentioned here as yet another option but it practically hasno utility in online marketplace context as by rule ‘lower downs’ areheavy in any Dynamid frame and the benefit gets distributed so much sothat it does not look like benefit to any of the users. On the otherhand, BHU is likely to leave majority of the users dissatisfied (muchlike classical MLM pyramids). Best bet is % BHU strategy, on themarketplace. Output: Compensation for all the subscribers calculatedusing the strategy specified in the Proxy Policy-Set.Micro-justification is accomplished.

Case Study: Step 9

Input: Penalties calculated for each subscriber in the IP distribution,Refer Table 24. MICRO_JUSTIFICATION_STRATEGY = “% BHU” BHU_PERCENT = 50MINIMUM_COMPENSATION_FACTOR = 0.4 MAXIMUM_PENALTY_FACTOR = 3.0 Process:CompensationPenalty (x) for each subscriber is calculated ensuring noneof the subscribers get less than (MIN_COMPENSATION_FACTOR XBaseCompensation) = 0.4 × $9.27 = $3.70 % BHU strategy is then appliedto distribute the penalty kitty back to the IP distribution Output:Compensation calculated for all subscribers factoring in penalties andmicro- justification strategy. Refer Table 25.

TABLE 25 Case Study Compensation Distribution Using (50) % BHU StrategySUB 1 53.99 T 57.43 S 29.51 SUB 2 27.22 J 28.71 . . . . . . SUB 52 4.66SUB 53 4.66

Note: The compensation distribution in Table 25 has anomalies as asubscriber with lower IP values is paid more in certain cases. Forexample, T with IP value 64 is paid $57.43 while SUB1 with IP value of68 is paid $53.99. This result is expected as the penalties are appliedand the penalty account was credited back to the subscriber baseconsidering Dynamid node parentage alone and not considering subscriberrank/s. These anomalies are addressed in the next and final step.

Step 10 (218): Accomplish Final Justification—Sanitize CompensationDistribution

Required Micro-justified compensation distribution to the subscribers.input: Process: Compensation distribution is scanned from top to bottomchecking for any anomalies; if encountered the compensation is averagedout to ensure no high ranked subscriber gets any less compensation thanhis/her successor. This step involves sharing child nodes betweendynamid nodes that have near equal IP performance ratings. Output:Sanitized compensation distribution.

Case Study: Step 10

Input: Penalties calculated for each subscriber in the IP distribution,Refer Table 25. Process: Sample: Compensation(1) [53.99] <Compensation(2) [57.43] Hence, SanitizedCompensation(1) =SanitizedCompensation(2) = [Compensation(1) + Compensation(2)]/2 =53.99 + 57.43/2 = 55.71 Output: Sanitized compensation calculated forall subscribers. Refer Table 26.

TABLE 26 Case Study Sanitized Final Compensation Distribution using (50)% BHU strategy SUB 1 $55.71 T $55.71 S $29.51 SUB 2 $27.96 J $27.96 . .. . . . SUB 52 $4.66 SUB 53 $4.66

Having shown and described a preferred embodiment of the presentinvention, those skilled in the art will realize that many variationsand modifications may be made to the described invention and still bewithin the scope of the claimed invention. Thus many of the elementsindicated above may be altered or replaced by different elements whichwill provide the same or substantially the same result and fall withinthe spirit of the claimed invention. It is the intention therefore tolimit the invention only as indicated by the scope of the claims.Therefore, as can be understood from a review of the foregoingdiscussion and accompanying drawing figures, the present invention isbroadly directed to an online marketplace that facilitates initiationand operation of online businesses. Consequently, while certainexemplary embodiments of the present invention are described in detailabove, the scope of the invention is not to be considered limited bysuch disclosure, and modifications are possible without departing fromthe spirit of the invention as evidenced by the following claims:

What is claimed is:
 1. A computerized method for initiating andexecuting a collaborative project comprising: at a computer server: (A)initiating a collaborative project proxy at an online site correspondingto said collaborative project; (B) creating for said collaborativeproject proxy a policy set comprising: (1) a description of saidcollaborative project; (2) a plurality of permissible contribution typeactions for facilitating online site subscriber contributions; (3) amapping of investment points to each of said plurality of contributiontype actions for allotting investment points to subscribers according totheir contribution type actions; (4) a set of rules governing saidinvestment point allotment to subscribers; (5) a definition ofcompensation to said subscribers against their respective investmentpoints earned in relation to their contribution type actions; (6) asettlement cycle definition describing conditions for executing aninvestment point settlement algorithm to compensate said subscribers;and (7) a set of parameters to said investment point settlementalgorithm; (C) receiving from each of a plurality of subscribers acommitment to contribute or invest in said collaborative project proxy,each commitment comprising at least: (1) an contribution type action; or(2) an investment amount; (D) allotting investment points to each ofsaid subscribers as defined in said policy set for said subscriber'scontribution type actions or investment amount; and (E) at completion ofeach settlement cycle, executing said investment point settlementalgorithm with said parameters to calculate for each subscriber amonetary equivalent to subscriber's investment points.
 2. Thecomputerized method of claim 1 wherein said collaborative project isselected from the group consisting of: (1) an open source technology;(2) a licensed product; (3) a privately owned design implementation; (4)a research topic; (5) a technology specification; (6) an industryspecification; (7) an engineering specification; and (8) a collaborativeinitiative that operates in connection with subscriber contributedcontent, data, and information.
 3. The computerized method of claim 1wherein said plurality of contribution type actions are selected fromthe group consisting of: equity investments types and proxy equityinvestment types.
 4. The computerized method of claim 3 wherein saidcontribution type actions are selected from the group consisting of:direct monetary investments and indirect monetary investments.
 5. Thecomputerized method of claim 4 wherein said indirect monetaryinvestments comprise skill based services provided to said collaborativeproject proxy resulting in equity stakes in said collaborative projectproxy.
 6. The computerized method of claim 1 wherein receiving from aplurality of subscribers a commitment to invest in said collaborativeproject proxy comprises receiving a commitment to invest prior toinitiation of said collaborative project proxy.
 7. The computerizedmethod of claim 1 wherein said collaborative project proxy is selectedfrom the group consisting of: (1) projects that are fully online; (2)projects that operate partly online; and (3) projects that do notoperate online.
 8. The computerized method of claim 1 wherein saidparameters comprise: (1) neighborhood performance index parameters; (2)dynamid parameters; (3) macro-level justification parameters; (4)micro-level justification parameters; and (5) a penalty rule set tocompare transformed neighborhood performance index values and tocalculate penalties.
 9. The computerized method of claim 8 whereinexecuting said investment point settlement algorithm with saidneighborhood performance index comprises deriving said subscriber'smicro-level investment point performance in the defined neighborhood.10. The computerized method of claim 1 wherein said subscribers areselected from the group consisting of: (1) an investor or a proxyinvestor who is an individual; (2) an investor or a proxy investor whois a business proxy; and (3) an investor or a proxy investor who is aproject proxy.
 11. A computerized system for initiating and executing acollaborative project comprising: a computer server executinginstructions to: (A) initiate a collaborative project proxy at an onlinesite corresponding to said collaborative project; (B) create for saidcollaborative project proxy a policy set comprising: (1) a descriptionof said collaborative project; (2) a plurality of permissiblecontribution type actions for facilitating online site subscribercontributions; (3) a mapping of investment points to each of saidplurality of contribution types for allotting investment points tosubscribers according to their contribution type actions; (4) a set ofrules governing said investment point allotment to subscribers; (5) adefinition of compensation to said subscribers against their respectiveinvestment points earned in relation to their contribution type actions;(6) a settlement cycle definition describing conditions for executing aninvestment point settlement algorithm to compensate said subscribers;and (7) a set of parameters to said investment point settlementalgorithm; (C) allot investment points to each of a plurality ofsubscribers as defined in said policy set for said subscriber'scontribution type actions or investment amount; and (D) at completion ofeach settlement cycle, execute said investment point settlementalgorithm with said parameters to calculate for each subscriber amonetary equivalent to subscriber's investment points; and a pluralityof subscribers computers for receiving at said computer server from eachof said plurality of subscribers a commitment to contribute or invest insaid collaborative project proxy, each commitment comprising at least:(1) an contribution type action; or (2) an investment amount.
 12. Thecomputerized system of claim 11 wherein said collaborative project isselected from the group consisting of: (1) an open source technology;(2) a licensed product; (3) a privately owned design implementation; (4)a research topic; (5) a technology specification; (6) an industryspecification; (7) an engineering specification; and (8) a collaborativeinitiative that operates in connection with subscriber contributedcontent, data and information.
 13. The computerized system of claim 11wherein said plurality of contribution type actions are selected fromthe group consisting of: equity investments types and proxy equityinvestment types.
 14. The computerized system of claim 13 wherein saidcontribution type actions are selected from the group consisting of:direct monetary investments and indirect monetary investments.
 15. Thecomputerized system of claim 14 wherein said indirect monetaryinvestments comprise skill based services provided to said collaborativeproject proxy resulting in equity stakes in said collaborative projectproxy.
 16. The computerized system of claim 11 wherein receiving from aplurality of subscribers a commitment to invest in said collaborativeproject proxy comprises receiving a commitment to invest prior toinitiation of said collaborative project proxy.
 17. The computerizedsystem of claim 11 wherein said collaborative project proxy is selectedfrom the group consisting of: (1) projects that are fully online; (2)projects that operate partly online; and (3) projects that do notoperate online.
 18. The computerized system of claim 11 wherein saidparameters comprise: (1) neighborhood performance index parameters; (2)dynamid parameters; (3) macro-level justification parameters; (4)micro-level justification parameters; and (5) a penalty rule set tocompare transformed neighborhood performance index values and tocalculate penalties.
 19. The computerized system of claim 11 whereincomputer server executing said investment point settlement algorithmwith said neighborhood performance index comprises deriving saidsubscribers micro-level investment point performance in the definedneighborhood.
 20. The computerized system of claim 11 wherein saidsubscribers are selected from the group consisting of: (1) an investoror a proxy investor who is an individual; (2) an investor or a proxyinvestor who is a business proxy; and (3) an investor or a proxyinvestor who is a project proxy.